Ashley's firm paid £1m by Tesco for six bikes

Nov 26 2009 by Andrew Mernin, The Journal

NEWCASTLE United owner Mike Ashley is facing legal action from Tesco after the supermarket mistakenly paid almost £1m for six bicycles which should have cost less than £1,000.

The supermarket giant is taking a subsidiary of Ashley’s Sports Direct business to court, seeking restitution of the overpaid monies following the error by its finance team.

Tesco should have paid Universal Cycles, a subsidiary of Sports Direct, £984 for six Muddy Fox Suspension Bikes but paid £984,000 instead.

Universal, an Essex-based company majority-owned by the leading sportswear retailer, has paid back £863,000 but Tesco claims it is holding on to more than £121,000 in outstanding funds, sources said yesterday.

It has launched legal action at the High Court to recover the remaining money, legal costs and a further £1,783 – the sum the retailer claims it is owed in interest at 8% a year.

The error was made on August 13 and Universal was asked to repay it 15 days later.

Universal then repaid some of the funds on September 29, but £121,412 is outstanding, sources said.

It is understood that a meeting will be held between the two parties in a bid to resolve the dispute out of court. A Tesco spokesman declined to comment on the ongoing case.

Meanwhile, Sports Direct – the firm which now controversially sponsors Newcastle United’s St James’ Park stadium – yesterday appointed high-profile former government drugs tsar Keith Hellawell as its new non-executive chairman.

Mr Hellawell, the 67-year-old former chief constable of West Yorkshire Police, said he was delighted to be joining the company, which operates about 400 stores worldwide.

Two years into his job as the Government’s drugs adviser he called for police to stop pursuing cannabis users so rigorously in an attempt to focus on pursuing drugs that cause “the major harm”, such as heroin and cocaine.

He later resigned the role in 2002 after the then Home Secretary David Blunkett announced plans to reclassify cannabis as a less dangerous drug.